Correlation Between Moderate Balanced and Federated Mdt

Can any of the company-specific risk be diversified away by investing in both Moderate Balanced and Federated Mdt at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Moderate Balanced and Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moderate Balanced Allocation and Federated Mdt All, you can compare the effects of market volatilities on Moderate Balanced and Federated Mdt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Moderate Balanced with a short position of Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Balanced and Federated Mdt.

Diversification Opportunities for Moderate Balanced and Federated Mdt

0.98

Correlation Coefficient

Moderate Balanced  Federated Mdt

Almost no diversification

The 3 months correlation between Moderate and Federated is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Balanced Allocation and Federated Mdt All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt All and Moderate Balanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Moderate Balanced Allocation are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt All has no effect on the direction of Moderate Balanced i.e., Moderate Balanced and Federated Mdt go up and down completely randomly.

Pair Corralation between Moderate Balanced and Federated Mdt

Assuming the 90 days horizon Moderate Balanced is expected to generate 2.09 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, Moderate Balanced Allocation is 1.63 times less risky than Federated Mdt. It trades about 0.17 of its potential returns per unit of risk. Federated Mdt All is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  4,685  in Federated Mdt All on May 27, 2025 and sell it today you would earn a total of  426.00  from holding Federated Mdt All or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Moderate Balanced Allocation  vs.  Federated Mdt All

Moderate Balanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moderate Balanced Allocation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Moderate Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated Mdt All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mdt All are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Federated Mdt may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Moderate Balanced and Federated Mdt

The main advantage of trading using opposite Moderate Balanced and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Balanced position performs unexpectedly, Federated Mdt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Federated Mdt will offset losses from the drop in Federated Mdt's long position.

The idea behind Moderate Balanced Allocation and Federated Mdt All pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.